Shares of Citigroup Inc (NYSE:C) recoveredin early trading on Wednesday, after the release of second-quarter results by big banks.
Here are some key analyst takeaways:
- BofA Securities analyst Ebrahim Poonawala maintained a Buy rating and price target of $176.
- RBC Capital Markets analyst Gerard Cassidy reiterated an Outperform rating and price target of $150.
Check out other analyst stock ratings.
BofA Securities: Citigroup’s stock fell despite the company reporting strong quarterly results and reiterating its full-year guide, Poonawala said in a note. The shares came under pressure due to high expectations and management’s "muddied messaging" on the outlook for the back half of the year, he added.
Management indicated that Citigroup could leverage its "strong revenue backdrop to pull forward growth driven investments," while raising expectations for severance costs from the around $800 million already incurred during the first half of the year, the analyst stated. "We view this as meaning that non-revenue driven expense growth would be slightly higher, pushing the efficiency ratio in the 60-60.5% range vs. 59.5-60%," he further wrote.
RBC Capital Markets: Citigroup reported net income of $5.8 billion, up 45% year-on-year, with earnings growing 61% to $3.15 per share, Cassidy said. The company delivered the best quarterly revenue in a decade, with total revenues up 14% year-on-year to $24.8 billion, "with all five business segments contributing to growth, a rare clean sweep," he added.
Revenue generated by Equity Markets grew 45% year-on-year to $2.3 billion, while Services revenues grew 18% to a record high of $6.4 billion, the analyst stated. Citigroup took an offense approach in the second quarter, "rather than the defense positioning it needed to take in the past couple of years as it executed its successful turnaround," he further wrote.
C Price Action: Shares of Citigroup had risen by 0.56% to $134.01 at the time of publication on Wednesday.
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